Saturday, September 30, 2006

Plunge in lending on credit cards

Credit card lending has seen its biggest fall since records began, Bank of England statistics showed today.

Net lending on cards fell by £311m last month, compared to a £117m increase during July. It is the first fall since May 1994 when credit card lending went down by £35m.
Prior to the announcement, the largest fall recorded was in August 1993 when credit card lending fell by £38m. Today's news follows reports which indicated that Britons are struggling to keep on top of their finances.

Debt in Britain is estimated to account for a third of all unsecured debt in Western Europe, while the average Briton owes more than £3,000. Increased credit card fees and consumer debt are likely to have contributed to the fall in lending figures.

UK economist at Capital Economics Vicky Redwood puts the slump down to a combination of reasons. "People are finding it harder to get credit in the first place as banks have tightened up their lending criteria.

"People also want to borrow less because of the high levels of debt they may already have." In addition, part of the fall could be down to people repaying more off their credit card debt, she added.

November's expected rise in interest rates – the second of the year – could have a knock-on effect on credit card lending, with homeowners shying away from taking on greater unsecured debt to focus on repaying increased mortgage rates. Miss Redwood added: "We have had ten years of strong credit growth. We could now see a few years of sluggish credit card lending."

Thursday, September 21, 2006

Credit reporting agencies in US

There are approximately 5,000 credit reporting and collection agencies operating in the United States today.

Some of major credit reporting agancies are -

1) Chilton Creditmatch Systems, 12606 Greenville Ave., Dallas, TX 75243

2) CIB “Credit Bureau Inc.”/EQUIFAX, P.O. Box 4091, Atlanta, GA 30302

3) Pinger Systems/Associated Credit Services Inc., 652 E. North Belt, Ste. #400, Houston, TX 77060

4) TRW Credit Information, 505 City Parkway West, Orange, CA 92667

Saturday, September 16, 2006

Credit Report Scores

Your credit report score has been affecting your credit history for years and you may not even know you have one or what it is. A credit score is a numerical number that is determined from a mathematical formula based on the information found in your credit bureau report. The formula is complex and looks at many things in your credit report to determine your score, like, how old your credit is, how you have paid your credit in the past and what standings your debts are currently at, how many debts you have, the number and age of inquires, how you utilize your credit, as well as what your balances are in relation to your credit limits. Each one of these categories carries a percentage towards your total score. As you can see, there are many things that are reviewed in scoring your credit, and as these things, such as credit card balances, change constantly, so will your credit report scores. Therefore, your report scores are meant to be a snap shot or summary of your credit history at or on that particular date.

There are 3 major credit reporting bureaus, Equifax, TransUnion and Experion. These agencies each have a credit bureau on you as well as their own credit scoring system, and as these credit bureaus do not share information, your credit reports and your credit reporting scores may all be different.

So, now that you know what credit scores are; you are probably wondering how they affect you and why should you be concerned with them. The reason is that credit report scores are one of the major factors a lender will use in order to determine your credit worthiness. This scoring sum is used by lenders as an indicator of how likely you are to repay your loans. This is based on studies done by the credit bureaus where they have determined, based on your credit history, a direct correlation between your credit reporting scores and your chance of defaulting on your credit obligations. The higher the credit score is the lower the risk of default, therefore, the lower the scoring the higher the rate of defaulting.

Credit reporting scores average around 700, with reporting scores ranging from 400 to 900. By understanding the factors in your credit history that affect your score you can be proactive in managing your credit bureau report, ensuring better loans and lower interest rates.

A wise consumer will stay on top of their redit reports and scoring. So before you apply for a loan or credit card, check out what your credit score is by obtaining your credit report online. Today you will find all the services available to assist you with this. You can get your totally free credit report along with your scores from all the major credit reporting agencies. You will also find excellent tools such as credit monitoring services to stay on top of your credit.

Sunday, September 03, 2006

Improving your credit score

Three of the chief appraisal reporting bureaus is using unique versions of FICO in the United States. It is important to have a good credit score in order to receive the best rates on home loans.

The Benefits of Your Credit Score There are many rewards that will come. A couple of upfront benefits are that you will meet the criteria to get loans. Stemming off of that is another benefit: you will be offered better interest rates. Which will save you money? A few different strategies are suggested:

  • A lower Credit Card Balances Owing substantial amount on your credit cards (which is relative to the sum of your limit) makes a large dent on your FICO score. 25% should be the maximum balance in your credit card. There are sometimes blunders such as a late payment stated. In fact you paid on time which can take about anywhere from 30 days to 3 months to process!

  • Erase Debts (Don't Simply Move Them Around) Increasing the ratio of your credit card equilibrium is determined by the following: The Number of closed accounts your balance and limits Balance Transferred with those. Your credit score will probably lower.

  • Give Payments on Time You increase your chance of improving your credit score when you are eager to meet your deadlines. Not only is it a good practice.